Inflation in Argentina highest in more than 3 decades

According to data released by the Argentine Institute of Statistics and Census (INDEC) on February 14, the country's inflation in January increased by 254.2% compared to last year, the highest level in 32 years.

Specifically, the consumer price index in January increased by 20.6% compared to the previous month, lower than the increase of 25.5% in December 2023 - also the highest level in the past 3 decades. Meanwhile, inflation in December 2023 increased by 211% compared to the same period last year.

The consumer categories most affected by inflation are daily goods and services, followed by food and non-alcoholic beverages, household appliances, maintenance services and medical services. Other categories affected include entertainment and culture, tourism-hotels-restaurants, transportation, telecommunications, clothing and footwear.

As the second largest economy in South America and a major exporter of grain, Argentina is struggling with serious challenges. Inflation is sky-high, two-fifths of the population live in poverty and there is a looming recession.

Clothing prices in the South American country are unacceptably high, with the cost of a new pair of jeans costing more than a third of the Argentinean's monthly minimum wage.

“With prices like this, we can’t go to the mall and buy whatever we want like before,” said Aylen Chiclana, a student in Buenos Aires.

When he took power in December 2023, Argentine President Javier Milei warned that the country's fight against inflation was not over.

President Milei began his term by devaluing the peso by more than 50%, cutting transport and fuel subsidies and removing price controls. Mr. Milei predicted inflation would be under control within two years.

IMF Managing Director Kristalina Georgieva has praised the strong measures taken by President Milei's administration to restore macroeconomic stability and address barriers to growth.

In late January, the International Monetary Fund (IMF) made a new disbursement of $4.7 billion, part of a $44 billion aid program for Argentina.

Last week, the Organization for Economic Cooperation and Development (OECD) forecast that Argentina's economic growth would shrink by 2.3% this year.

Minh Hoa (t/h)

Source